Legacy Assurance Plan: How the Procedural Rules of Probate Can Get in the Way of Your Goals

Summary: When you decide to create an estate plan, you obviously want a plan that will allow you to express your wishes and have those wishes carried out after you die. In some situations, though, the law may stop you from doing so. The legal rules regarding probate administration may bar you from naming the person you want to serve as the administrator of your estate. Using a living trust is one way you may be able to avoid this problem, as the legal rules create fewer prohibitions against serving as the successor trustee of a living trust as compared the administrator of probate estate. This type of plan may more fully allow you to achieve the goals you have for your estate.

Imagine, if you will, this situation: You are preparing to create your estate plan. You are widowed and have one child, a son. Your son, a responsible member of his community with a family and a good job, is the person you desire, not only to be the beneficiary of your wealth, but also the administrator of your estate. You have no one else who is as close to you whom you’d want to handle the job.

However, as you prepare to put your plans onto paper, you discover a stunning problem. You see, back when he was in college 25 years ago, your son, on a dare, shoplifted some alcohol from a liquor store. Because the bottles he grabbed happened to be worth a grand total of $205, he was convicted of a felony theft crime. Your estate planning attorney, much to your surprise and dismay, tells you that, in your state of residence, the law forbids people who have felonies on their records from serving as administrators of probate estates. As you sit in the lawyer’s office flabbergasted, you can only think… “Now what am I going to do?”

Sound far-fetched? It’s not. Some states have a flat prohibition that forbids anyone with any type of felony conviction on their record (no matter what type or how long ago) from serving as an administrator of any probate estate in that state. (And yes, some states allow for felony convictions for stealing as little as $200.)

This story highlights the fact that there are many procedural hurdles and potential pitfalls involved in going through the probate process. Probate administration is a creation of statutory law and court case decisions, so when an estate goes through probate, everything must be done in such a way that it passes through all the hoops that have been erected by the statutes and previous court ruling about probate.

There are ways to avoid these potential procedural pitfalls. One way, for example, is to create a plan that distributes most or all of your wealth through a revocable living trust. Because a living trust is not something that was created by probate laws, dividing and distributing your wealth using a living trust is a process that does not have to satisfy all the procedural hoops and hurdles of probate law. There are certain requirements, such as the way that you go about executing (signing) a trust, that the law says you have to meet, but there are many others that do apply to wills and probate that don’t apply to trusts.

Let’s return the example above. While you cannot name your son due to the law’s barrier against convicted felons serving as estate administrators, you probably can set up an estate plan centered around a revocable living trust and then name your son as the successor trustee of that trust, regardless of that shoplifting conviction from a quarter-century ago. The law generally establishes far fewer barriers preventing people serving as successor trustees. As compared to the laws governing estate administrators, you can generally name almost anyone you want to be your successor trustee.

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com.